UTILITY COMPARISON AND THE THEORY OF GAMES,

The note discusses two related topics in which game theory becomes creatively involved with questions of interpersonal utility comparison. The first topic concerns the nature of the utility functions that are admissible in a bargaining theory that satisfies certain minimal requirements. It shows, by a simple argument, that while cardinal utilities are admissible, purely ordinal utilities are not. Some intriguing intermediate systems are not excluded. The argument does not depend on the injection of probabilities or uncertainty into the theory. The second topic concerns a method of solving general n-person games by making use of the interpersonal comparisons of utility that are implicit in the solution. After two complementary modes of comparison have been distinguished, a principle of equivalence points the way to an attractively direct extension of the definition of the value of a game, from the transferable case to the nontransferable case.